XCL LTD.
NONQUALIFIED STOCK OPTION AGREEMENT
XCL LTD., a Delaware corporation (the "Company" or "XCL"),
effective as of the []st day of [], 199[], hereby irrevocably
grants to [] ("Optionee") in consideration of services rendered
and to be rendered by the Optionee, the right and option (the
"Option") to purchase [] shares of the Company's fully-paid and
non-assessable common stock, par value $.01 per share (the
"Shares") pursuant to the Company's Long-Term Stock Incentive
Plan, as amended and restated effective as of June 1, 1997 (the
"Plan") on or before [], 200[] (the "Expiration Date"), subject,
however, to the following terms and conditions:
1. Exercise. The Option herein granted may be exercised
subject to the provisions of the Plan and Section 5 hereof, as to
the following amounts of the Shares:
[] Shares on or after []
As to an additional [] Shares on or after []
As to an additional [] Shares on or after []
by giving written notice of such exercise to the Company at any
time (or exercised as to part of each allotment, from time to
time), specifying the number of Shares to be purchased. A
closing shall be held within ten days after receipt of notice of
exercise.
2. Exercise Price. The aggregate purchase price of the
Shares to be purchased pursuant to any exercise of this Option
shall be equal to the product of the number of Shares to be
purchased multiplied by the "Exercise Price", as defined
hereinafter. The Exercise Price for all Shares to be purchased
shall be $[] per Share.
3. Adjustments on Recapitalization. The number of
Shares subject hereto and the Exercise Price per Share shall be
proportionately adjusted for any increase or decrease, after the
date hereof, in the number of issued Shares resulting from the
subdivision or consolidation of Shares, or the payment of a stock
dividend on the Shares or increase in the Shares outstanding
effected without receipt of consideration by the Company,
provided that any Options to purchase fractional Shares resulting
from such adjustments shall be eliminated.
If the Company shall at any time merge or consolidate with
or into another corporation, Optionee (or other party entitled to
the Option) will thereafter receive, upon the exercise of the
Option, the securities or property to which a holder of the
number of Shares then deliverable upon the exercise of the Option
would have been entitled upon such merger or consolidation, and
the Company shall take such steps in connection with such merger
or consolidation as may be necessary to assure that provisions of
the Company's stock option plans shall thereafter be applicable,
as nearly as reasonably may be, in relation to any securities or
property thereafter deliverable upon the exercise of the Option.
A sale of all or substantially all of the assets of the Company
for a consideration (apart from the assumption of obligations)
constituted primarily of securities shall be deemed a merger or
consolidation for the foregoing purposes. In the event of the
proposed dissolution, liquidation or reorganization of the
Company, other than pursuant to a merger or consolidation as
hereinabove provided, the Option shall terminate as of a date to
be fixed by the Company's Compensation Advisory Committee;
provided that not less than 120 days (or such shorter period as
shall elapse between the date the Board of Directors shall decide
upon a dissolution, liquidation or reorganization and the
effective date of such dissolution, liquidation or
reorganization) prior written notice shall be given to Optionee
and Optionee shall have the right, during such period to exercise
this Option as to all or part of the Shares covered thereby,
including Shares as to which the Option would not otherwise be
exercisable.
4. Adjustment upon Exercise. If Optionee exercises this
Option by payment of all or a portion of the Exercise Price with
Shares which Optionee has owned for at least six months, Optionee
will receive an Option to purchase a number of Shares equal to
the number of Shares used in payment of the Exercise Price of the
original Option.
5. Closing. At the closing, full payment of the
aggregate purchase price for the Shares purchased by the Optionee
shall be made to the Company by delivery to the Company of
consideration acceptable to the Company for such Shares and such
Shares will then be delivered to Optionee. No Shares shall be
issued until full payment therefor has been made, and Optionee
shall have none of the rights of a shareholder with respect to
any Shares subject to this Option until a certificate for such
Shares shall have been issued. If the number of Shares purchased
at the closing shall not be all the Shares purchasable under this
Option, a new Nonqualified Stock Option Agreement with the same
terms and conditions as this Option, including, without
limitation, the Expiration Date, shall be issued for the balance
remaining of the Shares purchasable hereunder. Consideration
acceptable to the Company includes (i) cash (including a
certified or official bank check) or the equivalent thereof
acceptable to the Company, (ii) the equivalent fair market value
of Shares, properly endorsed, (iii) the equivalent fair market
value of any other property acceptable to the Company, or (iv)
any combination of (i), (ii) and (iii).
6. Expiration.
(a) The Option shall expire and become null and
void at 5:00 P.M. Lafayette, Louisiana time, on the Expiration
Date. This Option shall not terminate upon the Optionee's
termination of employment with the Company for any reason other
than termination of such employment by the Company for "cause" or
termination of such employment by Optionee without "good reason".
For purposes of this Agreement, the term "cause" shall mean
Optionee's (i) engagement in gross negligence or willful
misconduct in the performance of his duties with respect to the
Company or any of its affiliates, (ii) conviction of a felony or
misdemeanor, (iii) refusal without proper legal reason to perform
his duties and responsibilities to the Company or any of its
affiliates or (iv) breach of any provision of a written
employment agreement between Optionee and the Company; provided,
however, that if Optionee's employment with the Company is
subject to and governed by the terms of a written employment
contract as of the date of Optionee's termination of employment,
the term "cause" for purposes of this Agreement shall include
only those events or circumstances which, pursuant to the terms
of such employment agreement, enable the Company to terminate
Optionee's employment without liability to Optionee (whether in
the nature of breach of contract damages, liquidated damages,
punitive damages, compensatory damages or otherwise). For
purposes of this Agreement, the term "good reason" shall mean (i)
the removal of Optionee as Vice Chairman of the Company, (ii) a
reduction in Optionee's annual base salary by more than 10%
unless such reduction was pursuant to a Company-wide cost
reduction program pursuant to which all Company employees were
treated substantially equally, (iii) a breach by the Company of
any obligation owed to Optionee under any written agreement
between Optionee and the Company with respect to Optionee's
employment with, or benefit from, the Company or any of its
affiliates or (iv) death or total disability of Optionee.
(b) Notwithstanding any provision in this Option to
the contrary, this Option shall become immediately exercisable in
whole or in part, at the election of Optionee, upon the
occurrence of an event which constitutes a change in control of
XCL, provided that under no circumstances shall an option be
exercisable within six months (or such greater or lesser period
prescribed or permitted by any applicable rule promulgated under
the Exchange Act, including, without limitation, Rule 16b-3 from
its grant date. For purposes of this Paragraph (b), a "change in
control of XCL" shall mean a change in control of a nature that
would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); provided
that, without limitation, such a change in control shall be
deemed to have occurred if (Y) any "person" (as such term is used
in Section 13(d) and 14(d) of the Exchange Act), other than XCL
or any person who on the date the Plan is amended is a director
or officer of XCL is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of XCL representing 20% or more of the
combined voting power of XCL's then outstanding securities,
unless such person owns, directly or indirectly, as of the date
the Plan is amended, more than 25% of the combined voting power
of XCL's then outstanding securities, in which case, if any such
person (a "Major Stockholder") becomes the beneficial owner,
directly or indirectly, of 33a% or more of the combined voting
power of XCL's then outstanding securities; provided, further,
however, that acquisition of 33a% or more of such combined voting
power shall not constitute a "change in control of XCL" if (1)
such combined voting power does not exceed 372% or more of the
combined voting power of XCL's then outstanding securities, and
(2) either (i) to the extent any such increase in a Major
Stockholder's beneficial ownership results from a redemption or
purchase by XCL of its securities, or (ii) if the Board of
Directors of XCL, by vote of two-thirds (b) of the full Board, in
good faith, determines (hereinafter referred to as a
"Determination") both (A) that such acquisition does not
constitute, in fact, a change in the control of XCL and (B) that
such Major Stockholder does not and cannot then control XCL or
(Z) during any period of two consecutive years prior to the date
of such Determination, individuals who at the beginning of such
period constituted the Board of Directors cease for any reason to
constitute at least a majority thereof, unless the election of
each director who was not a director at the beginning of such
period has been approved in advance by directors representing at
least two-thirds of the directors then in office who were
directors at the beginning of the period.
7. Transferability. This Option is granted in
recognition of the personal services of the Optionee to the
Company or its affiliates and is not assignable or transferable
other than by will or by the laws of descent and distribution.
During the lifetime of the Optionee, this Option shall be
exercisable only by him.
8. Subject to Plan. The Option granted hereunder has
been issued under the Plan and is specifically subject to and
conditioned upon approval by the stockholders of the Company of
the June 1, 1997 amendment and restatement of the Plan and shall
be null and void ab initio if such approval is not obtained. In
addition to the provisions hereof, this Option will be subject to
the power under the Plan of the Company's Compensation Advisory
Committee and the Board of Directors to make interpretations of
the Plan and of any options granted thereunder, and to make
determinations and take other actions with respect to the Plan;
provided, however, that if any such interpretations,
determinations or other actions shall conflict with any of the
provisions of this Agreement, the provisions shall hereof
control; and provided further, that this Option shall not be
treated as an incentive stock option as defined in Section 422A
of the Internal Revenue Code of 1986, as amended. By acceptance
hereof, Optionee acknowledges receipt of a copy of the Plan and
recognizes and agrees that determinations, interpretations or
other actions respecting the Plan may be made by a majority of
the Board of Directors or by the Compensation Advisory Committee.
9. Securities Laws. Optionee acknowledges that he has
been informed of, or is otherwise familiar with, the nature and
the limitations imposed by the Securities Act of 1933, as amended
(the "Act"), the Exchange Act, and the rules and regulations
thereunder (in particular, Rule 144, promulgated under the Act
and Section 16 of the Exchange Act, and Rule 16b-3 promulgated
thereunder), concerning the Shares issuable upon exercise of this
Option and agrees to be bound by the restrictions embodied in the
Act, the Exchange Act and all the rules and regulations
promulgated thereunder.
10. Reservation of Shares. The Company will at all
times reserve and keep available out of its authorized Shares,
the required number of Shares issuable upon the exercise of this
Option.
11. Optionee not a Stockholder. Optionee shall not be
entitled by reason of this Option to any rights whatsoever as a
stockholder of the Company.
12. The Company's Right to Terminate Employment.
Nothing contained in this Agreement shall confer upon Optionee
the right to employment by the Company or any of its affiliates.
13. Withholding. Optionee hereby agrees that he will
make such arrangements as the Company deems necessary to
discharge any federal, state or local taxes imposed upon the
Company in respect of this Option.
14. Entire Agreement. This Agreement contains the
entire agreement of the parties relative to the subject matter
hereof, superseding and terminating all prior agreements or
understandings, whether oral or written, between the parties
hereto relative to the subject hereof, and this Agreement may not
be extended, amended, modified or supplemented without written
consent of the parties hereto.
15. Governing Law. This Agreement and all amendments or
changes relating hereto shall be deemed to have been entered into
pursuant to, and shall be governed by, the laws of the State of
Delaware.
16. Notices. Notices given pursuant hereto shall be
registered or certified mail and shall be deemed delivered four
(4) days after deposit in the United States mail, postage
prepaid, addressed as follows:
If to the Company:
XCL Ltd.
000 Xxx Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
If to Optionee, to the address below Optionee's
signature.
IN WITNESS WHEREOF, this Agreement is executed as of the
[]st day of [], 199[].
Attest
XCL LTD.
By:___________________________
Name:_________________________ By:___________________________
Title:________________________ Name:_________________________
Title:________________________
The undersigned Optionee hereby accepts the foregoing
Nonqualified Stock Option Agreement dated as of the []st day of
[], 199[] (the "Date of Grant"), and the undertaking on his part
contained therein, and agrees to all of the terms and conditions
thereof.
______________________________
OPTIONEE
Address:
